Why the Minneapolis Fed Head Changed His Mind and Backed QE3

In articles today and last week, the Journal documented the remarkable transformation of Minneapolis Fed President Narayana Kocherlakota
from a policy hawk against the central bank’s easy-money policies, to
policy dove, who is strongly supportive. As today’s article explained, Federal Reserve Chairman Ben Bernanke played a role in Mr. Kocherlakota’s changing views.

There’s another economist who played a role in shaping Mr.
Kocherlakota’s views, and you probably haven’t heard of this one. He is a
38-year-old Argentine professor at the Massachusetts Institute of Technology named Ivan Werning.

Mr. Kocherlakota cited a paper
by Mr. Werning in his speech last week in which he called for strong
new commitments by the Fed to keep interest rates low until unemployment
has dropped substantially. In an interview, Mr. Kocherlakota said Mr.
Werning is a “brilliant economist” and that this paper is “really
important.”...MORE

*Alphaville has been on top of Kocherlakota's importance for a while now: